Deputy Minister: No New Financing For Cooperatives Failing To Repay Loans

KUALA LUMPUR, Feb 11 (Bernama) -- Cooperatives with unsatisfactory repayment performance will not be considered for new financing, the Dewan Rakyat was told today.

Deputy Minister of Entrepreneur and Cooperatives Development Datuk Mohamad Alamin said that the measure was aimed at ensuring public funds were managed with integrity and provided maximum benefits to all cooperative members.

“Any outstanding financing payments will be recovered and appropriate legal action will be taken,” he said during a question-and-answer session.

He said this in response to a question from Roslan Hashim (PN-Kulim Bandar Baharu) on whether the ministry intended to stop financing cooperatives that failed to perform despite repeated assistance.

Mohamad said that last year, a total of 66 cooperatives had been approved for financing through the  Malaysia Cooperative Societies Commission’s Revolving Capital Fund (TMP-SKM), amounting to RM75.32 million.

He also said that 78 cooperatives had benefited from a business development assistance grant totalling RM8.59 million, which was provided to support working capital needs and the purchase of business assets.

Responding to a supplementary question from Mohd Kurniawan Naim Moktar (BN-Kinabatangan) on the factors behind cooperative failure, Mohamad said it was often due to a lack of a common goal among members and the appointment of less professional cooperative board members.

He said these factors had caused many cooperative businesses to become unviable and remain conventional, as their management lacked creativity in exploring new opportunities.

Mohamad said that some cooperatives were found to be overly dependent on financial assistance and government incentives, without making serious efforts to expand their businesses.

--BERNAMA